Last updated: How carmakers can get back on track: Focus on the customer

How carmakers can get back on track: Focus on the customer

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The automotive industry is considered to be the engine of the German economy, and German car brands are renowned worldwide. But the pandemic hit German manufacturers and suppliers hard. Carmakers that want to remain competitive must realign their business models to suit their customers’ rapidly changing needs.

While it’s true that a survey of the global automotive industry by consulting firm EY revealed that record profits were earned in the first half of 2021, car sales appear to be stalling. According to the German Association of the Automotive Industry, around 25% fewer new cars hit the roads in the first seven months of 2021 compared with the same period in 2019.

“As a result, the pre-crisis level in the German car market is still out of view,” the association said.

What’s more, the industry is in the midst of an enormous technological disruption. The days of the internal combustion engine seem to be numbered, with topics such as digital manufacturing, electromobility, autonomous and connected driving, and new mobility offerings keeping manufacturers busy. But in order to succeed, carmakers have to do more than innovate.

The industry would be well advised to rethink its approach from the ground up by focusing on customer centricity.

Carmakers: Keeping up with the customer

“Customers are no longer willing to wait, they’re making demands. And tomorrow, they’ll probably demand something completely new again,” says Urs Krämer, CEO of Sopra Steria Consulting.

Meeting these ever-changing demands on an individual basis and, when possible, staying a step ahead has become key to success in the digital economy for carmakers and brands in all industries.

“The Individual Customer,” a study by Sopra Steria and the F.A.Z. Institute, confirms this trend. According to the study, companies that are focused on their customers in everything they do are much more competitive than other companies.

However, consistent customer centricity requires companies get a handle on their own datasets, first and foremost. According to the study’s authors, this is still an issue in many places.

For example, many companies lack a clear data strategy that includes the information that’s already available internally. Having an effective and strategic way to manage customer data opens the door  to new approaches and personalization that increases customer loyalty.

Getting closer to the customer: smart shows how it’s done

The car brand provides an example of how carmakers can achieve customer centricity. This year, Daimler’s subsidiary plans to not only launch a new generation of A-segment cars, but also to deliver an innovative business model with data-driven direct sales to customers.

To do so, the OEM will control all customer touchpoints centrally. What this means in practice is that sales will take place on the car manufacturer’s e-commerce platform in the future.

“As a result, we have a customer journey that we can coordinate in a very personalized manner,” says Björn Schick, Director CX smart Europe GmbH.

This centralized, direct sales model also includes services, providing a holistic view that allows smart to get closer to the actual needs of the customer, he adds.

A lot of brands have a long way to go in taking these kind of steps to improve customer experience.

“Many companies still think in terms of individual channels, but customers don’t care about channels at all,” explains Kai Hudetz, managing director of the Institute for Retail Research (IFH) in Cologne.

He advises companies to connect the different touchpoints seamlessly and orchestrate an end-to-end customer experience.

Rev up revenue + customer loyalty.
Discover how digital tech is transforming the auto industry HERE.

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